Tokenization of real world assets and stablecoins: a nuanced view

Additionally, while tokenization of real world assets (RWA) could potentially expand the use case for stablecoins, we think that at the current stage, the value add of many tokenization doesn't look convincing enough. For example, we don't think tokenization itself can meaningfully increase liquidity for certain assets, such as private credit, because the key challenge remains how to value these assets. On the other hand, the HK regulators have made it clear that the same regulatory requirement and investor protection will be applied to the same product, whether it's tokenized or not, hence removing potential arbitrage.

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